Colonial Pipeline: cyber attack draws attention to besieged US energy system

“Our goal is to make money and not creat[e] problems for society”, claim DarkSide, the hacking group behind the ransomware attack that shut down an essential US energy pipeline this weekend. The Colonial Pipeline normally transports 2.5m barrels daily of refined petroleum products from the US Gulf Coast to the densely populated east coast. The shutdown continued into Monday with worries that a prolonged outage could create supply shortages of petrol and jet fuel.

The disturbance comes at an inopportune moment. Worries about rising energy prices already abound in the US. So do cyber threats. Their number highlight the vulnerabilities of American energy infrastructure.

Oil refining capacity in the US hit a record 19m barrels per day in 2020, according to the US Department of Energy. However, that figure is only 5.6 per cent greater than a decade ago. Moreover, the most recent figure included a large Philadelphia refinery that has since shut down. Refining shortcomings have made the north-east reliant on fuels sent by pipelines.

Mother Nature, not malign actors, were behind a February energy catastrophe in Texas. A storm meant 52,000 M/W of power generation was idle at one moment. What power was available led to billions of dollars of unanticipated charges for energy providers and consumers. Texas has a unique deregulated energy market that exacerbated the pain of market forces. The question is whether private sector players have underinvested in technologies needed to protect systems.

If the Colonial pipeline can be restored this week then any effects on shortages and fuel price increases will be muted. But petrol prices in the US are already on the move. The average gas price in the country in early May hit a pandemic record of $2.79 per gallon. A year earlier, that price was just $1.68. Bad actors may be easy villains but American companies and regulators will soon have to ask if their actions and inaction have left both the industry and its consumers as sitting ducks.

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